The number of mortgage products available has reached the highest level since the Spring of 2020. With lenders offering competitive deals, interest rates have fallen month-on-month.

As the UK housing market remains strong, house prices have continued to rise. At the same time, mortgage deals have increased to their highest level since the start of the COVID-19 pandemic, according to data from Moneyfacts.

Recent mortgage lending statistics from the Bank of England also reveal that lenders advanced £83.3bn of mortgage borrowing in the first quarter of 2021. This is the highest level since Q4 2007. Additionally, the value of mortgage commitments, which is lending that will advance in the coming months, was 15% higher year-on-year at £77.5bn.

Lenders gaining further confidence

Lenders are continuing to gain more confidence as the demand for borrowing has increased. At the same time, mortgage options have been on the rise, providing more choice for property buyers.

On 1 June 2021, 4,243 mortgages were available, according to Moneyfacts. This is a rise from 3,927 deals on 1 May. Year-on-year the number of mortgage deals has increased by 1,433 when 2,810 products were available on 1 June 2020.

Mortgage availability improved in several loan-to-value (LTV) ratios. A substantial number of new mortgages coming to the market are for first-time buyers with 5% and 10% deposits.

While improvements in availability were recorded across most of the LTV tiers, it was at 95% LTV that nearly a quarter of the new deals were launched.  It is important to note that although there is an increase in the number of products available to the higher LTV brackets, lenders are still wary when it comes to mortgages north of 80% LTV and the interest rates do reflect this.

As Mortgage rates drop below 1%,  it could be the time to remortgage and save thousands of pounds

New mortgage deals are at their lowest ever rates, with two-year fixes down to 0.95% and five-year fixes at 1.17%.

So, what is the cause of this?

  • Very low UK interest rates
  • A house-buying boom boosted by a stamp duty cut
  • Banks with a surplus of cash to lend as so many people built up savings during the pandemic

The result is fierce lending competition for the best customers. That means, for some, remortgaging  (switching deal without moving property) can result in savings.

Delays are rife right now – act in time to avoid moving to a Standard Variable Rate (SVR)

The stamp duty deadline and house-buying boom means brokers, lenders and conveyancing solicitors are in constant demand. This means the remortgaging process is taking longer, sometimes months right now.

People on fixed or discount mortgage deals ending this year will need to start planning remortgaging earlier than normal to avoid being automatically put on to the lenders’ far more expensive standard variable rates (SVRs). It is best to start planning remortgaging three to six months before your current mortgage is due to end. This is particularly important for self-employed people.

So do not delay, think about remortgaging today.

At Beaufort Mortgages, we find the best mortgage rates for First Time Buyers, Home Movers, those looking to Remortgage and landlords requiring Buy To Let mortgages. Get in touch with Dan Godfrey, our independent mortgage adviser.